Ricketts: 70% From Gameday Revenues, But is that True?

Recently Tom Ricketts said the Chicago Cubs earn 70% of their revenue through game day. Things like ticket sales, concessions, and souvenirs. He mentioned this in response to the new proposal that the players accept a 50/50 split on total baseball revenue, instead of the already agreed-upon plan to earn a prorated portion of their salaries.

However you feel about that idea, the statement that the Cubs earn 70% of their revenue through game day sales is very much in contrast with all other teams in baseball. Over the past 10 years or so, teams across Major League Baseball have averaged around 30% of their revenues from game day activities. Why would the Cubs rely so much more on ticket revenue than the rest of the league?

Revenue by the numbers

MLB teams are privately-owned organizations, and they do not openly discuss all of their revenues, or expenses. Any actual representation of team revenues are comprised of compiling information from organizations MLB teams work with and any little information teams actually release. Things like attendance and ticket price are things that can be tabulated using team data.

What is also available is information surrounding TV revenues, both locally and nationally, which include streaming.

The Cubs brought in an estimated $471 million in 2019, which marked the fourth consecutive year the Cubs exceeded $400 million. With all forms of TV revenue (locally on the three networks, as well as ESPN and FOX) the Cubs earned $150 million of the $471 million. This in itself is 32% of all team revenues. Perhaps Tom was estimating, game-day revenue can still account for 68% and the statement is still mostly true, right?

The Cubs averaged 38,208 per game in attendance, which is around 4,290 under capacity. In 2019, the Cubs average ticket price was $59.49, which would bring their total ticket revenue to $184,112,507.52. This is 40% of total revenue, which is high according to league estimates.

To account for 68% of all revenue, the Cubs would have to earn roughly $136 million from concessions and souvenir sales. This is very likely.

But we haven’t begun to incorporate sponsorships and marketing revenue. While team-specific numbers are not public, there is a breakdown of total sponsorship dollars in MLB. This was around $938 million in the 2018 season (nothing publicly published on the 2019 season). This is from major sponsors like Nike, Bank of America, T-Mobile, and the like. Let’s assume teams split the income, which ends up averaging to $31 million a team.

Then teams also have their local sponsorships, things like the Impact sponsorships of the bullpen and electronic scoreboards, the Captain Morgan Club, Budweiser, Wintrust, Under Armour, Guaranteed Rate signage. These all bring in a lot of dollars annually, however not published.

The Cubs have no less than 25 sponsorship deals locally. If they all are paying just $250,000 this accounts for another $6.25 million per season. This plus the TV revenue accounts for 40% of their total revenue and we haven’t even added streaming revenues yet.

Now it is becoming a little more difficult to believe Tom’s stance on this, isn’t it? Heck, even if the local revenues were free, the numbers are still pointing the Cubs ticket sales and other stadium revenues accounting for around 55% of all revenue.

When we look at the 2020 season and beyond, with the addition of Marquee Sports Network, the impact ticket revenue has on the Cubs is even less. With Comcast likely to come onboard before baseball is played, that carriage deal in itself can be worth $100 million. Add in the other networks (and back out the Sinclair cut) and this is much more lucrative than ticket revenue.

Now, with only half the games expected to be played in 2020 (if any at all) TV revenue will be severely reduced, yes, but this is still a bigger driver on income. Perhaps in year’s past, the 70% number was closer to the truth, and maybe there’s a lot of information that isn’t available or factored into these numbers. But, when I heard the comments they just didn’t rub me the right way and after looking into them they still seem to be inflated. I’m not accounting for the 40% the Cubs pay into Major League Baseball’s revenue-sharing. But, that doesn’t change the numbers that come in, just those that go out.

Take it for what you will, but it just seems like another attempt by the baseball owners at controlling the narrative when it comes to player salaries. It’s easy to understand that teams will make less in 2020 if there are no fans. It is easy to understand that player’s make a lot of money. It isn’t a huge jump for a fan to make, relating the loss of revenue to the highly paid players. They also don’t expect people to look into the numbers, especially when much of those numbers aren’t public.